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After all, in 2018 the government has not prevented —or even tried to prevent — the implementation in the UK of the General Data Protection Regulation and MiFID II. While its supporters commend the GDPR as setting a global standard for maintaining personal privacy in the era of digital data, its detractors mock it as a solution in search of a problem. Its introduction has undoubtedly taken up a huge amount of high-level professional time. Sia Partners, the management consultants, have estimated that the average cost for a FTSE 100 company of complying with the GDPR is £15 million. By implication, the cost for the FTSE 100 group as a whole is £1.5 billion ­— and that takes no account of the thousands of smaller businesses, charities and universities where memos are being written, meetings held, phone calls placed and so on.

MiFID II (or “Markets in Financial Instruments Directive 2014/65/EU”, to give it its full name) is supposed to give greater protection to investors and to increase the transparency of the investment process. Again the question is begged of exactly what was wrong beforehand. IHS Markit and Expand, a company affiliated to the Boston Consulting Group, have together published a report estimating that the cost of meeting the new rules to top firms in the financial sector has been $2.1 billion. Not all of these firms would be in the UK, but a high proportion must have operated out of London.

An increase in productivity occurs when output per unit of input rises. It is the essence of economic progress. The writing of memos, the holding of meetings and the placing of phone calls are all examples of labour input. With the GDPR and MiFID II, no measurable extra output will appear. The message in short is, “Labour input up, output unchanged, productivity down.” Like the proposed regulations to ban tungsten lighting in the theatre, the GDPR and MiFID II are EC edicts that will reduce productivity growth. More brutally, they will make Europeans — or anyhow people living in the EU — poorer. That is the wider macroeconomic meaning of the cost assessments of three topical instances of EU legislation; the assessments were made by reputable sources close to the industries affected.
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